U.S. Trustee objects to Toys ‘R’ Us debtors’ amended plan releases

By Caroline Salls

Pittsburgh, Sept. 25 – The U.S. Trustee overseeing Toys “R” Us, Inc.’s Chapter 11 case objected to approval of the disclosure statement for the second amended plans of reorganization filed for the Toys Delaware and Geoffrey debtors, according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

Acting Region 4 U.S. Trustee John P. Fitzgerald IV said in his objection that one issue raised in his previous objection to the debtors’ original disclosure statement remains outstanding.

Specifically, Fitzgerald said he still objects to the “adequacy and legality of the proposed third-party releases and exculpation clause” included in the second amended disclosure statement.

The U.S. Trustee said the third-party release and exculpation provisions “are overly broad and inconsistent with Fourth Circuit Law.”

Toys ‘R’ Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19, 2017 under Chapter 11 case number 17-34665.

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